Trading Summary (February 12, 2003)

The Toronto Stock Exchange fell slightly on Wednesday, with the TSX Composite index down 21.50 points to close at 6,452.54. The big story was the collapse of the golds, where there was bad news all around.

The TSX gold index fell 8.76 points to 184.11, a loss of 4.5% of value. Part of the reason was a sharp fall in bullion prices in the morning: the early London fix put gold at US$363.15, but by the afternoon fix — shortly after the North American market opened — the flags went down at US$356.30. Weakness in the gold price continued through the New York trading day, with the Comex price closing near US$353, and the down-trend continued in Pacific trading.

A large part of the hit ot the index, though, was a $1.20 drop in Barrick Gold, to $24.05, which announced just after the opening that chief executive Randall Oliphant had been dismissed and replaced with director and Trizec Hahn apparatchik Gregory Wilkins. Barrick’s statement said the company’s board had moved Wilkins in “to address its concerns over the company’s recent performance and to restore Barrick to the leadership position in the gold industry it has consistently maintained.”

Placer Dome fell $1.05 to $16. It announced it was exercising a back-in right to take up a 70% interest in the Donlin Creek project in Alaska from junior NovaGold Resources, which was down 7 to $4.61. NovaGold had been operating the project with Placer in as a 30% partner. Under the companies’ joint venture agreement, Placer must spend US$30 million, complete a feasibility study, and make a decision to put Donlin Creek into production at an annual rate of 600,000 oz. to earn back its interest.

Silver producer Pan American Silver was down 49 to $10.15 after announcing that it and Corner Bay Silver were back on track for a merger following a decision by water-resource regulators in Mexico to allow Corner Bay’s Alamo Dorado silver project to take water from an existing reservoir. Corner Bay shares were up 85 at $4.70.

The base metal and mining stocks were one of the few market sectors that made even modest gains today, with the metals and mining index up 0.28 point at 131.50. Ivanhoe Mines was the volume leader, with 2.5 million shares trading, and took the prize for biggest rebound among the base metals, rising 24 to close at $3.24, a gain of 8% on the day. Ivanhoe had announced on Monday that it would be releasing a resource estimate for its Turquoise Hill gold-copper prospect in Mongolia later in the month.

Bright earnings news came from both Aur Resources, which was 7 better at $3.63, and Cameco, which rose 68 to $36.13. Aur posted a US$10.1-million profit in 2002, announced after the market closed, and Cameco booked earnings of $46 million for the year.

Among the Toronto juniors, heavy trading continued in Northern Orion Exploration, which rose 4.5 to 18 on a volume of 17.6 million shares.

Canada’s junior exchange felt the impact of falling bullion prices with investors unloading gold-related issues. The S&P-TSX Venture Exchange composite index lost 13.18 points, or 1.2% and closed at 1,081.30.

American Bonanza Gold Mining ended the session at 29, down 3 on nearly 900,000 shares. Stock in the junior has traded heavily since Toronto-listed Goldcorp reported that it has taken a 10.4% stake in the company. American Bonanza Gold is currently completing underground exploration of the Copperstone gold project in Arizona.

Samex Mining ended the session flat at 25 on 590,000 shares. The company recently picked up 14.75 sq. km of ground in central Chile. The price tag comes in at US$50,000 payable by the end of this month. Dubbed the El Zorro project, the concessions hosts a number of small abandoned workings. The vendor retains a 30% back-in right should the junior discover a deposit containing not less than two million tonnes of contained equivalent copper.

Unigold, formerly known as Caribgold Resources ended the day at 70, down 15 on 389,650 shares. Caribgold Resources transferred all its mining properties to Caribgold Minerals, and then 50% of Caribgold Resources’ shares were acquired and cancelled in exchange for common shares of Caribgold Minerals, effectively consolidating its shares on a 2 for 1 basis. The company also changed its name to Unigold.